Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — FY2014 Earnings Presentation
32 slides from Zurich Insurance's earnings presentation, Feb 12, 2015
Slide 1: Annual results 2014
Annual results 2014 Presentation live media event February 12, 2015 Zurich Insurance Group
Slide 2: Agenda
Agenda 09:00 hrs. Welcome - Maeve Gallagher, Head External & Digital Communications Results overview - Martin Senn, Chief Executive Officer Financial highlights - George Quinn, Chief Financial Officer General Insurance overview - Mike Kerner, CEO General Insurance Global Life overview - Kristof Terr
Slide 3: Results overview
Results overview Martin Senn, Chief Executive Officer
Slide 4: Key financials
Key financials ROE below target, strong Z-ECM and cash remittances FY-14 KEY RESULTS TARGET METRICS OVER STRATEGIC PERIOD FY-14 Target BOP BOPAT ROE1 11.1% 12 – 14% USD 4.6bn (-1%) 9M-14 Target Z-ECM2 127% 100 – 120% NIAS Cumulative FY-14 Net cash 3-year target USD 3.9bn (-3%) remittances USD 3.7bn
Slide 5: Report card – Group
Report card – Group Continuing progress towards our 2016 targets GROUP STRATEGY 2014 KEY ACTIONS 2015 PRIORITIES Prioritizing Investments in corporate, Continue investments in NAC and commercial and select retail Global Corporate / CLP investment in 1 markets Targeted investments in select ret
Slide 6: Key messages
Key messages General Good progress in improving accident year profitability, further Insurance improvement needed in 2015 and beyond Progressing bank distribution and CLP growth strategy, Global Life implementing in-force management initiatives Farmers On the right track, further positive momentum i
Slide 7: Financial highlights
Financial highlights George Quinn, Chief Financial Officer
Slide 8: Group – Business operating profit
Group – Business operating profit Weaker result for Q4 BOP BY SEGMENT (USDm) RECONCILIATION (USDm) -1% -27% 454 4,680 4,638 1,113 1,393 4,084 812 1,564 322 2'859 2'894 736 160 2'112 573 518 280 27 385 294 27.3% tax rate 1'272 1'273 308 1'351 4,638 3,895 411 408 420 1'402 1'516 1'573 10 32 129 73 -26
Slide 9: Group – Balance sheet and capital
Group – Balance sheet and capital Strong solvency capital on all key metrics SHAREHOLDERS’ EQUITY (USDm) SOLVENCY RATIOS (%) 2,539 -1,229 285% 258% 302% -136 34,735 278% 3,895 217% 215% 32,503 -2,837 185% 126% 127% 127% 114% FY-13 Dividend1 NIAS Net CTA (excl. Pension FY-14 Z-ECM SST3 Solvency I URG
Slide 10: Group – Cash remittances & dividend proposal
Group – Cash remittances & dividend proposal Good cash remittances across all segments NET CASH REMITTANCES (USDbn) CUMULATIVE DIVIDEND (USDbn)1 3.7 17.3 2.9 14.6 2.1 2.4 2.4 11.8 1.4 0.9 9.1 0.6 0.6 0.7 1.2 0.9 6.3 0.5 0.1 -1.1 -1.1 -1.0 3.6 FY-12 FY-13 FY-14 1.4 2008 2009 2010 2011 2012 2013 2014
Slide 11: General Insurance overview
General Insurance overview Mike Kerner, CEO General Insurance
Slide 12: Report card – General Insurance
Report card – General Insurance Improving AY profitability, more to be done on “turnarounds” PRIORITY MARKETS1 MANAGE FOR VALUE GWP2 (USDm) BOP (USDm) Completed Russia Retail exit 35,584 36,333 2,912 2,894 Further profit improvement actions launched in 3,068 188 36 65 3,371 3,068 209 manage for
Slide 13: General Insurance – Topline
General Insurance – Topline Broadly stable, but with some competitive pressures GWP GROWTH IN LC1 (%) RATE CHANGE2 (%) Q4-13 Q3-14 Q4-14 3% GC 8% 5% 2% 1% 12% -1% NAC 2% 6% 0% 1% 2% 0% EMEA -2% 3% 2% 2% -2% 3% IM 12% 5% 5% 5% 34% 2% Total3 3% 4% 2% 2% 7% FY-14 FY-13 FY-12 1 In local currency. 2 GWP
Slide 14: General Insurance – Combined ratio
General Insurance – Combined ratio Improved accident year profitability, lower PYD COMBINED RATIO SPLIT (%) COMBINED RATIO BY REGION (%) 100.7% 98.0% 97.3% 4.4% 3.2% 2.3% 96.2% GC 94.3% 96.5% NAC 97.0% 96.0% 98.3% 97.2% 95.6% EMEA 98.1% 104.6% IM 102.3% 97.3% Total -2.0% -2.4% -0.6% 98.0% FY-12 FY-1
Slide 15: General Insurance – BOP components
General Insurance – BOP components Stable operating profits but improved UW result BOP BREAK DOWN (USDm) KEY DRIVERS (USDm) +1% 18 2,859 2,894 78 2,112 605 812 207 55 22 2,894 2,859 2,587 2,384 2,288 -184 -72 -57 -112 -239 -95 -52 FY-121 FY-13 FY-14 FY-13 UWR Investment RCG NTR NCI FY-14 Income Unde
Slide 16: General Insurance – Prioritizing investments
General Insurance – Prioritizing investments We made significant investments in innovation, which have already started generating returns My Zurich, a secure risk management portal for customers to manage their global insurance and risk engineering programs Corporate Access to all issued policie
Slide 17: Global Life overview
Global Life overview Kristof Terryn, CEO Global Life
Slide 18: Report card – Global Life
Report card – Global Life Continued growth in priority markets, in-force management initiatives underway PRIORITY MARKETS1 MANAGE FOR VALUE APE (USDm) NBV (USDm) Exit of marginal positions 5,203 1,022 Initiatives underway to deliver up to USD 100m BOP 801 9452 increase from in-force management i
Slide 19: Global Life – New business
Global Life – New business Strong growth in Europe and APME despite currency headwinds APE (USDm)1 NBM & NBV1 NET INFLOWS2 & AUM NBM (%) Net inflows (USDbn) 21.9 27.0 22.1 5.5 +18% 1.4 5,203 -2.7 4,767 72 147 4,418 566 -4% -1% 500 208 NBV (USDm) AuM (USDbn) 173 125 530 1,060 267 266 1,160 1,022 254
Slide 20: Global Life – BOP by region
Global Life – BOP by region One-off impacts offset each other BOP BY REGION (USDm) KEY DRIVERS (USDm) 0% 1,273 1,351 1,272 -23 49 1,273 63 -31 -56 131 1,272 83 134 131 141 83 173 243 173 141 222 222 245 155 245 841 778 841 819 778 0 -7 -63 -7 -63 FY-12 FY-13 FY-14 FY-13 Europe Latin North APME Other
Slide 21: Global Life – New business by pillar
Global Life – New business by pillar Strong volume growth led by CLP FY-14 KEY FINANCIALS1 APE (USDm) CLP single 5,203 NBM PVNBP 4,767 4,418 premium 1'703 1'908 1'394 1'506 1'584 1'741 22.1% USD 53.0 bn USD 7.4 bn 1'558 1'441 1'554 FY-12 FY-13 FY-14 KEY DRIVERS NBV (USDm) 1,060 949 269 1,022 Stron
Slide 22: Global Life – 2015 priorities
Global Life – 2015 priorities GROUP STRATEGY GLOBAL LIFE PRIORITIES 2015 Prioritizing Continue strong growth in Bank Distribution investment in 1 distinctive Strengthen Corporate Life & Pensions presence in key markets positions Drive targeted local growth opportunities Managing Embed result
Slide 23: Farmers update
Farmers update George Quinn, Chief Financial Officer
Slide 24: Report card – Farmers Exchanges
Report card – Farmers Exchanges1 Positive momentum continues NET PROMOTER SCORE2 RETENTION3 76.8% 35.6 37.1 33.3 34.5 75.9% 30.0 75.3% 74.8% 74.7% FY-13 Q1-14 Q2-14 Q3-14 Q4-14 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 NET GAIN / LOSS OF AGENTS4 NEW BUSINESS COUNT GROWTH5 16.4% 193 208 4.4% 6.8% 45 -32 -2.7% -1
Slide 25: Farmers Exchanges – KPIs
Farmers Exchanges1 – KPIs Continued growth momentum GWP GROWTH (%) COMBINED RATIO (%)4 SURPLUS5 (USDbn) 2.4% 105.4% 38.4% 36.6% 6.1% 100.5% 33.3% 99.4% 0.6% 6.0% 5.2% 6.3 5.9 5.6 -0.9% 99.3% 5.0 5.4 94.5% 94.2% 4.6 -2.1% -3.7% 1.0 1.0 0.9 Q4-132 Q1-14 Q2-14 Q3-14 Q4-143 FY-122 FY-13 FY-14 FY-12 FY-1
Slide 26: Farmers – KPIs
Farmers – KPIs Improved result at Farmers Re BOP (USDm) MGEP MARGIN (%)1 FARMERS RE CR (%)2 1’573 7.3% 103.7% 1’516 1’402 7.2% 7.2% 100.2% 5.9% 98.3% 5.6% 4.9% 1'383 1'390 1'428 97.8% 94.6% 93.4% 125 190 -26 FY-12 FY-13 FY-14 FY-12 FY-13 FY-14 FY-12 FY-13 FY-14 Catastrophes 3 FMS FRe CR (excl. catas
Slide 27: Q&A session
@ ZURICH Q&A session
Slide 28: Closing remarks
Closing remarks Martin Senn, Chief Executive Officer
Slide 29: Key messages
Key messages General Good progress in improving accident year profitability, further Insurance improvement needed in 2015 and beyond Progressing bank distribution and CLP growth strategy, Global Life implementing in-force management initiatives Farmers On the right track, further positive momentum i
Slide 30: Disclaimer and cautionary statement
Disclaimer and cautionary statement Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives of Zurich Insurance Group Ltd or the Zurich Insurance Group (the ‘Group’).
Slide 31: For further information
For further information CONTACT US VISIT OR FOLLOW US Media Relations Maeve Gallagher Sylvia Gäumann Riccardo Moretto Björn Emde Roman Hess Pavel Osipyants Phone +41 (0)44 625 21 00 Email [email protected] www.zurich.com Website www.zurich.com Twitter @Zurich Download: Zurich Investors and Media App
Slide 32: Calendar
Calendar March 6 Publication of Annual Report and invitation to Annual General Meeting 2015 April 1 Annual General Meeting 2015, Zurich May 7 Results for the three months to March 31, 2015 May 21 Investor Day, Zurich August 6 Half year results 2015 November 5 Results for the nine months to September
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